Ascent Industries (NASDAQ:ACNT) Releases Earnings Results

Key Points

• Second-quarter performance improved significantly: Revenue rose 37.6% year over year to $25.7 million, while adjusted EBITDA from continuing operations increased to $1.5 million from a $0.3 million loss. The company also reported EPS of $0.07.
• Growth initiatives are gaining traction: Ascent converted 17 commercial opportunities into roughly $5.8 million of annualized revenue, with its project pipeline reaching a record $140 million. The company remains on track for $3 million-$5 million in annualized gross-profit improvements.
• Profitability and cash flow remain concerns: Gross margin fell to 21.6% because of raw-material, freight, conversion-cost and product-mix pressures, while first-half operating activities used $7.7 million and the cash-conversion cycle expanded to 75 days. Analysts maintain an average “Sell” rating.

Ascent Industries (NASDAQ:ACNT - Get Free Report) issued its quarterly earnings results on Tuesday. The company reported $0.07 earnings per share (EPS) for the quarter, Zacks reports. The business had revenue of $25.67 million during the quarter. Ascent Industries had a negative return on equity of 4.37% and a net margin of 1.54%.

Here are the key takeaways from Ascent Industries' conference call:

• Second-quarter momentum strengthened: Net sales rose 37.6% year over year to $25.7 million, pounds shipped increased 15.2%, and adjusted EBITDA from continuing operations improved to $1.5 million from a $0.3 million loss. Legacy sales grew approximately 28% excluding Midwest Graphic Sales.
• Commercial execution continued to improve, with 17 opportunities converted into approximately $5.8 million of annualized revenue and the active project pipeline reaching a record $140 million. Midwest Graphic Sales contributed $1.9 million of revenue after its May 4 acquisition and was immediately accretive to adjusted EBITDA.
• Management remains on track for $3 million-$5 million of annualized gross-profit improvement from sourcing, manufacturing, and network optimization initiatives, including a debottlenecking project that added more than 500,000 pounds of annual capacity.
• Revenue growth is not yet translating fully into profitability: second-quarter gross margin declined to 21.6% from 26.1%, pressured by petroleum-based raw-material and freight inflation, conversion costs, production timing, and mix. Management expects a moderate gross-margin contraction in the fourth quarter due to seasonality and program turnover.
• Cash conversion remains a key concern, with first-half operating activities using $7.7 million and the cash conversion cycle rising to 75 days. Management is targeting a five-day improvement, which it estimates could release approximately $1 million-$1.5 million of cash, while prioritizing liquidity and working-capital improvement before additional acquisitions or share repurchases.

Ascent Industries Price Performance

Shares of Ascent Industries stock traded down $0.15 during trading on Tuesday, reaching $15.38. 137,586 shares of the stock traded hands, compared to its average volume of 89,228. The company has a market capitalization of $139.04 million, a price-to-earnings ratio of 118.32 and a beta of 0.52. The business has a fifty day simple moving average of $14.57 and a two-hundred day simple moving average of $14.74. The company has a debt-to-equity ratio of 0.01, a current ratio of 8.69 and a quick ratio of 7.82. Ascent Industries has a 52-week low of $11.62 and a 52-week high of $17.92.

Hedge Funds Weigh In On Ascent Industries

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Goldman Sachs Group Inc. purchased a new stake in shares of Ascent Industries during the 1st quarter worth approximately $227,000. Empowered Funds LLC grew its holdings in shares of Ascent Industries by 6.5% in the first quarter. Empowered Funds LLC now owns 47,620 shares of the company's stock valued at $603,000 after purchasing an additional 2,927 shares in the last quarter. Jane Street Group LLC purchased a new position in shares of Ascent Industries in the first quarter valued at $269,000. Geode Capital Management LLC increased its position in Ascent Industries by 91.9% in the second quarter. Geode Capital Management LLC now owns 194,433 shares of the company's stock worth $2,452,000 after purchasing an additional 93,125 shares during the last quarter. Finally, JPMorgan Chase & Co. increased its position in Ascent Industries by 121,970.0% in the second quarter. JPMorgan Chase & Co. now owns 12,207 shares of the company's stock worth $154,000 after purchasing an additional 12,197 shares during the last quarter. 26.05% of the stock is owned by institutional investors.

Wall Street Analysts Forecast Growth

Separately, Weiss Ratings reiterated a "sell (d+)" rating on shares of Ascent Industries in a research report on Friday, July 24th. One research analyst has rated the stock with a Sell rating, According to data from MarketBeat.com, the company presently has an average rating of "Sell".

Ascent Industries Company Profile

Ascent Industries Co an industrials company, produces and distributes stainless steel pipe and tube and specialty chemicals in the United States and internationally. The company operates through two segments, Tubular Products and Specialty Chemicals. It manufactures welded pipes and tubes, primarily from stainless steel, duplex, and nickel alloys; and ornamental stainless steel tubes for automotive, commercial transportation, marine, food services, construction, furniture, healthcare, and other industries.

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